Delhi High CourtDelhi High Court Sets Aside Orders Upholding Arbitral Award In Favour of Kalanithi Maran In SpiceJet Dispute, Quashes ₹270 Crore Payment Directive Case Title: Ajay Singh and Anr vs Kal Airways Private Limited & Anr. Case Number: FAO(OS) (COMM) 179/2023 The Delhi High Court division bench of Justice Yashwant Varma and Justice Ravinder Dudeja set aside...
Delhi High Court
Case Title: Ajay Singh and Anr vs Kal Airways Private Limited & Anr.
Case Number: FAO(OS) (COMM) 179/2023
The Delhi High Court division bench of Justice Yashwant Varma and Justice Ravinder Dudeja set aside a Single-judge decision that upheld an arbitral tribunal's decision requiring the cash-strapped SpiceJet and its chairman, Ajay Singh, to refund ₹ 270 crore plus interest to media baron Kalanithi Maran and his company, KAL Airways.
The arbitral award directed SpiceJet to refund ₹ 270 crore to Maran, with additional interest rates of 12% per annum on warrants and 18% per annum on the awarded sums if not paid timely.
On July 31, 2023, Justice Chandra Dhari Singh upheld the tribunal's award and held that SpiceJet failed to demonstrate any illegality in the arbitral decision. The court dismissed Maran's request to reinstate his 58.46% stake in SpiceJet and his demand for damages.
Thereafter, SpiceJet and Ajay Singh appealed the decision of the Justice Chandra Dhari Singh.
Case Title: Mercator Ltd. Vs Dredging Corporation Of India Ltd And Connected Matters
Citation: 2024 LiveLaw (Del) 598
Case Number: O.M.P.(EFA)(COMM.) 2/2019, EX.APPL.(OS) 27/2020, EX.APPL.(OS) 182/2020, EX.APPL.(OS) 346/2022, EX.APPL.(OS) 2985/2022 & EX.APPL.(OS) 1620/2023 and Connected Matters
The Delhi High Court bench of Justice Prateek Jalan held that enforcement of foreign awards should not be declined on grounds relating to the composition of the tribunal, which could have been raised before the Tribunal and before the seat Court, but were not so raised. It held that the judgment debtor did not object, even at the stage of appointment, on this ground.
The bench held that:
“This argument is quite evidently an afterthought, intended only as speculative litigation with the fond hope that by flinging mud on a foreign arbitral award, some of the mud so flung would stick.”
Case Title: Delhi Tourism And Transportation Development Corporation Vs M/S Satinder Mahajan
Citation: 2024 LiveLaw (Del) 597
Case Number: O.M.P. (COMM) 337/2021 & I.As. 14635/2021, 14862/2022
The Delhi High Court single bench of Justice Prateek Jalan held that the seat of the arbitration proceedings is to be determined on the basis of connection with the arbitral proceedings, and not with the cause of action for the underlying disputes.
Case Title: Deepak Maurya Vs Saraswathi Supari Processing Unit & Ors.
Citation: 2024 LiveLaw (Del) 595
Case Number: ARB.P. 420/2023
The Delhi High Court single bench of Justice Dinesh Kumar Sharma held that the Court is not required to behave in a mechanical manner to send a party's dispute to the arbitral tribunal and must consider the fundamental issues, within the parameters outlined in Section 11(6-A) of the Arbitration and Conciliation Act, 1996.
The bench held that:
“Since it is a well-settled law that the jurisdiction of this Court at the stage for making reference is very limited and the referral court cannot enter into the roving enquiry. However, at the same time court is not expected to act in a mechanical fashion and refer the disputes at the mere request. The matter can only be referred if the petitioner has shown existence of some artriable dispute between two parties. The purpose of notice under Section 21 is also to apprise the other party about the disputes between the parties. Strangely, the petitioner neither in the petition nor in the notice has enumerated such disputes.”
Case Title: Tipping Mr Pink Private Limited Vs Tipping Mr Pink Private Limited
Citation: 2024 LiveLaw (Del) 594
Case Number: O.M.P.(I) (COMM.) 116/2024
The Delhi High Court single bench of Justice Sanjeev Narula granted an ex-parte interim injunction in favor of Tipping Mr Pink Private Limited to prevent Savera Eats from using the “Burger Singh” registered trademark. The bench held that despite the termination of the franchise agreement, Savera Eats continued to operate the franchise outlet under the Petitioner's registered trademark “Burger Singh”.
Case Title: Mercator Ltd. Vs Dredging Corporation Of India Ltd And Connected Matters
Citation: 2024 LiveLaw (Del) 591
Case Number:O.M.P.(EFA)(COMM.) 2/2019, EX.APPL.(OS) 27/2020, EX.APPL.(OS) 182/2020, EX.APPL.(OS) 346/2022, EX.APPL.(OS) 2985/2022 & EX.APPL.(OS) 1620/2023 and Connected Matters
The Delhi High Court bench of Justice Prateek Jalan held that the public policy argument while considering enforcement of foreign awards has to be construed narrowly and in consonance with international notions of public policy. The bench held that all violations of statute or supporting legislation do not satisfy this ground, and violations must be of fundamental policies considered shocking to the conscience of the Court.
Calcutta High Court
Case Title: MFAR Constructions Private Limited vs Bengal Shristi Infrastructure Development Limited
Case Number: FMAT (ARBAWARD) No.30 of 2022
The Calcutta High Court division bench of Justice I. P. Mukerji and Justice Biswaroop Chowdhury held that attempts made by the arbitrator to encourage the parties to reach a settlement cannot be termed as 'conciliation proceeding' under Part-III of the Arbitration and Conciliation Act, 1996. The bench held that conciliation is seen as an independent proceeding or an alternative dispute redressal forum the object of which is to reach a settlement between the parties. It has its own procedure and ultimate result.
Case Title: Bmg Gulf Fzc Vs Quippo Oil And Gas Infrastructure Limited
Case Number: AP-COM/327/2024
The Calcutta High Court single bench of Justice Ravi Krishan Kapur held that it is for members of the Bar to introspect and take necessary steps and spare the Courts of the unpleasant duty. The decision came while reviewing applications presented before the Commercial Court and High Court, which were held to be beyond their jurisdiction.
Specifically, the Commercial Court was held to be not empowered to entertain applications under Section 9 of the Arbitration and Conciliation Act, 1996. Additionally, the bench held that the High Court lacked the authority to appoint an arbitrator in International Commercial Arbitration.
Allahabad High Court
Case Title: M/s Geo Miller and Co. Pvt. Ltd. vs UP Jal Nigam and Others 2024 LiveLaw (AB) 330
Case citation: 2024 LiveLaw (AB) 330
Case No.: Civil Misc. Arbitration Application No. 5 of 2024
The Allahabad High Court single bench of Justice Shekhar B. Saraf held that if the High Court appoints the arbitrator under Section 11 of the Arbitration Act, it has the jurisdiction to entertain Section 29A application for extending the mandate of the arbitrator.
While acknowledging that the issue of the appropriate court for Section 29A applications was pending before a larger bench, the High Court held that the current position continued to be governed by previous judgments such as Indian Farmers Fertilizers Cooperative Ltd. v. Manish Engineering Enterprises.
Case Title: Sh. Dharmveer Tyagi And Others vs. Competent Authority, Dfcc, Special Land Acquisition (Joint Officer Organization) And Others 2024 LiveLaw (AB) 325 [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 257 of 2024]
Citation: 2024 LiveLaw (AB) 325
The Allahabad High Court has held that Section 5 of the Limitation Act does not apply to proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 and the timeline provided in Section 34(3) for challenging an arbitral award must be strictly adhered to.
Section 34(3) of the Arbitration and Conciliation Act, 1996 provides a period of 3 months for challenging an arbitral award. Proviso to Section 34(3) empowers Court to condone a delay of 30 days if sufficient cause for delay is show, “but not thereafter.”
The Court held that “but not thereafter” in Section 34(3) has been placed to imply the legislative intent behind “strict and non-negotiable timelines” for challenging arbitral awards. The Court held that usage of the phrase excludes discretion which may be exercised by the Courts in condoning the delays in filing of applications under Section 34.
Case Title: M/S Moksh Innovations Inc. Lko. Thru. Manager Jitendra Singh Bisht vs. E City Property Management And Services (P) Ltd. New Delhi Thru. Property Manager And Others 2024 LiveLaw (AB) 324 [SPECIAL APPEAL DEFECTIVE No. - 266 of 2024]
Citation: 2024 LiveLaw (AB) 324
The Allahabad High Court has held that by virtue of Section 11(7) of the Arbitration and Conciliation Act, 1996, special appeal and letters patent appeal against orders passed under Section 11(4), (5) and (6) of the Act is not maintainable. The Court held that since the Amending Act of 2019 which did away with Section 11(7) had not been notified by way of Official Gazette, the bar placed by Section 11(7) is still in force.
Section 11(7) of the Arbitration and Conciliation Act, 1996 bars any appeal, including letters patent appeals against an order passed under Section 11(4), (5) and (6) of the Act by the Supreme Court or the High Court. By way of Section 3 of the Arbitration and Conciliation (Amendment) Act, 2019, Section 11(7) was omitted from the Act of 1996.
Case Title: Nirankar Dutt Tyagi and Anr. vs. N.H.I. Unit Dehradun and Anr. 2024 LiveLaw (AB) 323 [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 593 of 2023 ]
Citation: 2024 LiveLaw (AB) 323
While deciding an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, the Allahabad High Court has held that a delay in filling the appeal could not be condoned without finding compelling reasons for the same.
Appellant approached the High Court under Section 37 of the Act of 1996 after a delay of 393 days.
The Court relied on M/s N.V. International v. State of Asam and Ors. wherein the Apex Court added a grace period of 30 days to the standard period of 90 days available for filling an appeal under Section 37 of the Act. This was done keeping in mind the objective of speedy resolution of all arbitral disputes, which would have been the ultimate priority of the framers of the Act of 1996. However, the Supreme Court held that an inordinate delay of more than 120 days would not be liable to be condoned.
Case Title: Gaursons Promoters P. Ltd. vs. Aakash Engineers And Contractors 2024 LiveLaw (AB) 322 [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 144 of 2023]
Citation: 2024 LiveLaw (AB) 322
The Allahabad High Court has held that though a legal issue going to the root of the matter can be raised for the very first time in appellate proceedings but the same is dependent on the facts of the case.
The bench comprising of Chief Justice Arun Bhansali and Justice Vikas Budhwar held
“There is no quarrel to the proposition of law that a legal issue going into the root of the matter can be raised for the very first time in the appellate proceedings. However, the question is dependent upon the facts of a particular case.”
The Court held that since admission is the best piece of evidence and the officer of the appellant, in his cross-examination, had supported the claim the claimant-respondent, without challenge to such statement, no challenge could be made to the arbitral award under Section 34 or Section 37 of the Arbitration and Conciliation Act, 1996.
Case Title: Ganga Prasad Memorial Trust and another vs DHK Eduserve Limited
Case Number: Appeal Under Section 37 Of Arbitration And Conciliation Act 1996 No. - 161 Of 2024
The Allahabad High Court bench of Chief Justice Arun Bhansali and Justice Vikas Budhwar held that the question as to the consideration of the grounds, upon which the application under Section 9 of the Arbitration and Conciliation Act, 1996 is based can only arise when it is being considered by the Court on the merits, i.e., when the court is called upon to apply its mind to the grounds urged in the application.
Further, the bench held once an Arbitral Tribunal is established, the court cannot entertain an application under Section 9 unless the remedy under Section 17 proves to be inefficacious.
The bench held that:
“The Commercial Court, while dealing with an application under Section 9 of the Act, is required to record findings on the three parameters, i.e., (i) prima facie case, (ii) balance of convenience, and (iii) irreparable injury, which determination is sine qua non for the purpose of grant of relief in any application of the present nature. Failure of the Commercial Court to record any finding on the said aspects worth the name, vitiates the order impugned.”
Case Title: National Highways Authority Of India Vs Musafir And Others
Case Number: APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 41 of 2021
The Allahabad High Court single bench of Justice Shekhar B. Saraf held that the arbitral tribunal cannot recall or modify its award under Section 33 of the Arbitration and Conciliation Act, 1996. It held that none of the provisions of the Arbitration and Conciliation Act, of 1996, give the arbitral tribunal the power to recall and modify its award. It held that any act which the arbitral tribunal is not empowered to do under the Arbitration Act is void ab initio.
The bench held that:
“What is clear from the aforesaid provision is that the arbitral tribunal can only correct and interpret an award. An additional award can be made, only in respect of claims which have been omitted from the arbitral award. Interpretation of the award and additional award can be made only upon a request received by a party. However, correction can be done by the arbitral tribunal on its own within thirty days from the date of the arbitral award. However, none of these provisions, give the arbitral tribunal the power to recall and modify its award. Arbitral tribunals are not courts of law which are bestowed with inherent powers. Arbitrators are required to act within the confines of the arbitration agreement, and the framework enshrined in the Arbitration Act. Any act which the arbitral tribunal is not empowered to do under the Arbitration Act is void ab initio.”
Andhra Pradesh High Court
Case Title: M/s Shree Swaminarayan Travels vs M/s Oil Natural Gas Corporation Limited
Case Number: Arbitration Application No.13 of 2023
The Andhra Pradesh High Court bench of Chief Justice Dhiraj Singh Thakur held that to maintain an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Applicant is required to show that the Respondents failed to act as required under the arbitration clause and failed to refer the disputes to the Arbitrator even after a notice invoking the arbitration clause was served on the Respondents.